As a top mortgage company in Utah, we at City Creek Mortgage are here to help with every area of your mortgage loan process. We can help you get the best financing for your new home, but we can do much more than this as well – we can also help with some tactics to help pay the mortgage off quicker.
One such tactic? Making biweekly mortgage payments instead of the more standard monthly option. Let’s look at the basics of this option, why it might be right for you, and also some important words of caution in this area.
Biweekly Payment Basics
Simply, a biweekly payment refers to you sending half your mortgage payment every two weeks, rather than paying once a month. Most mortgage loans come with a standard monthly payment option, so some buyers wonder if they can even pay biweekly – the answer is almost always yes. A few options that are usually available include:
- The lender offers a biweekly payment option
- A third party offers a biweekly payment option on your behalf and is paid a fee
- You handle biweekly payments on your own end
Here are the primary benefit of biweekly mortgage payments:
- If you make a half payment every two weeks rather than one full payment every month, you’ll end up with 13 full payments made for a calendar year rather than 12. This will reduce the principal balance on your loan, which will lower your interest totals and allow you to pay the loan off sooner.
- In many cases, paying a half payment every two weeks is much easier to budget for based on the way you receive your paychecks.
Biweekly payments might not be perfect for every situation. Here are a few basic cautions to keep in mind:
- Make sure your lender allows these payments and applies one of them each month to the principal balance – this is instead of holding it until the other half arrives and then processing it like a normal payment.
- If you use a third party for these payments, be diligent on your research with them. Check to make sure fees are worth the services, and ensure they are sending payments at the proper times.
- If you choose to make these payments on your own, check with your lender first to ensure there are no penalties and that payments will be handled in the proper format.
For more on biweekly mortgage payments, or to learn about any of our mortgage services, speak to the pros at City Creek Mortgage today.